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Perry v. Economy Fire and Casualty Co.

Case Date: 12/30/1999
Court: 1st District Appellate
Docket No: 1-99-1479

Perry v. Economy Fire and Casualty Co., No. 1-99-1479

1st District, December 30, 1999

FIRST DIVISION

OSCAR PERRY AND MINNIE PERRY,

Plaintiffs-Appellees,

ECONOMY FIRE AND CASUALTY COMPANY,

Defendant-Appellant

(Tyrone Morris, a Minor, By Angela Morris, His Mother and Next Friend,

Defendant-Appellee).

 Appeal from the Circuit Court of Cook County

Honorable LESTER D. FOREMAN, Judge Presiding.

JUSTICE GALLAGHER delivered the opinion of the court:

This appeal involves an insurance coverage dispute. The issue in this case is whether defendant-appellant, Economy Fire & Casualty Company (Economy), gave its insureds, Oscar Perry and Minnie Perry, plaintiffs-appellees (the insureds), proper notice of a change in coverage in their insurance policy at the time of renewal. This change was a newly added exclusion for injuries resulting from exposure to lead-based paint (lead paint exclusion). The other party involved in this appeal is defendant-appellee, Tyrone Morris, a minor, by Angela Morris, his mother and next friend (the minor tenant), who has filed suit against the insureds alleging injuries caused by his ingestion of lead-based paint on property that his family rented from the insureds. Economy now appeals from the trial court's order of April 2, 1999, denying its motion for summary judgment and granting the cross-motion for summary judgment of the minor tenant and the insureds. We conclude that Economy did not give proper notice of the lead paint exclusion and is obligated to afford a defense to the insureds under the terms of their insurance policy. We affirm.

An insured bears the burden of knowing the contents of insurance policies. Furtak v. Moffett, 284 Ill. App. 3d 255, 671 N.E.2d 827, 829 (1996). This general rule applies to original, newly issued policies. The present case, however, involves a policy renewal. The insured's affirmative duty to review the terms of the original policy does not extend to a renewal policy that has been modified. It has been stated that "it is inequitable to require an insured to search the fine print of each renewal policy." (Emphasis added.) Government Employees Insurance Co. v. United States, 400 F.2d 172, 175 (10th Cir. 1968). Rather, it is the insurer who has a duty in that instance to adequately inform the insured of the changes to the policy. At the time of renewal here, the Illinois legislature had clearly defined this duty in section 143.17a of the Illinois Insurance Code (215 ILCS 5/143.17a (West 1992)) (the Act), the relevant portions of which state as follows:

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